SBP will bor­row for projects

South Bruce Penin­sula coun­cil learned two ma­jor projects – with a price tag of over $520,000 for this year’s por­tion of the work – are com­pletely un­funded.

Sev­eral coun­cil mem­bers ex­pressed sur­prise as they learned at a coun­cil meet­ing in Wiar­ton, Sept. 5, that the funds – in­tended to be cov­ered by this year’s mu­nic­i­pal tax levy – were never col­lected.

As a re­sult, the Sauble town square and Colpoy’s Bay dock re­pairs – at a to­tal bud­geted cost over two years of $900,000 for the for­mer and $250,000 for the lat­ter – will now be funded through deben­ture, amor­tized over 10 years.

An­nette Rob­son, deputy man­ager of fi­nan­cial ser­vices for the town, also re­ported a third item from the town’s “wish list” – GPS track­ing soft­ware – re­mained un­funded at a cost of $35,000. This item will be con­sid­ered in the town’s 2018 bud­get de­lib­er­a­tions.

Rob­son found the short­fall in tax-sup­ported cap­i­tal projects when she was up­dat­ing the town’s re­serve and re­serve fund spread­sheets.

Staff also found about $256,000 mis­tak­enly ear­marked to buy new ve­hi­cles for the public works de­part­ment with gas tax funds.

Rob­son told coun­cil these pur­chases – which have al­ready been made – be­came in­el­i­gi­ble un­der the Gas Tax Agree­ment in 2014.

There was some con­fu­sion dur­ing coun­cil’s dis­cus­sion of the miss­ing funds, with Coun­cil­lor Ana Vukovic ask­ing, “Where did it go?”

“It was never there in the first place,” Coun­cil­lor Craig Gam­mie (ac­cu­rately) replied.

Rob­son con­firmed the money was not trans­ferred from the op­er­at­ing bud­get to the cap­i­tal re­serve.

Coun. Vukovic said that’s fine, but it’s there some­where.

“It was col­lected from the tax­pay­ers,” Gam­mie said.

“No. It didn’t make it that far,” Rob­son said.

In an in­ter­view af­ter the coun­cil meet­ing, Mayor Jack­son said coun­cil thought they had about half the costs bud­geted for 2017 for the two projects.

“It seems that, from what we’ve gath­ered, it was one coun­cil meet­ing, a bud­get meet­ing, and all of those ex­tra projects that we agreed to do, some­how didn’t make it to the books and so they were never levied.”

Jack­son called the Sept. 5 de­ci­sion to deben­ture the projects “very stan­dard” for large projects.

“We did it with the arena, we did it with the re­con­struc­tion or re­design of Blue­wa­ter Park, we’ve done it for many dif­fer­ent projects. That’s what hap­pens when towns want to take on big projects, they al­most al­ways have to deben­ture them. We were hop­ing to take money from two sep­a­rate years in the bud­gets, but it didn’t ob­vi­ously work out that way,” she said.

Sev­eral op­tions to ad­dress the Sauble town square project were pre­sented to coun­cil, in­clud­ing can­celling the project.

“I’ve rec­om­mended that it re­main un­funded and be deben­tured at the end of the project over 10 years,” Rob­son said. This would mean once the project was com­plete next year – coun­cil would ap­ply for a loan from In­fra­struc­ture On­tario, “our cheap­est av­enue to fund­ing” she said in a tele­phone in­ter­view, Sept. 6.

The loan would be at a fixed rate of about 2.7 or 2.9 per cent in­ter­est, she said, de­pend­ing on the rates at the time coun­cil ap­plies. A by­law will have to be passed to go to deben­ture, she added.

Rob­son’s rev­e­la­tions led to un­char­ac­ter­is­ti­cally sub­dued voices as coun­cil mem­bers strug­gled to un­der­stand how this hap­pened and what to do about it.

Coun­cil­lors Gam­mie and Vukovic – both of whom have not been in sup­port of the Sauble town square project as pro­posed – ini­tially seemed in­cred­u­lous that the money was not there.

“We don’t have the money? We should not do this project then,” Gam­mie said, suggest­ing coun­cil de­fer both ini­tia­tives un­til next year.

Deputy Mayor Jay Kirk­land said the town still hadn’t con­sid­ered or ap­plied for any provincial or fed­eral grants for the project.

“I’m still in favour of mov­ing for­ward on a 10-year deben­ture. We’ve done it on a lot of projects in the mu­nic­i­pal­ity,” he said.

Mayor Jack­son said she had a ver­bal com­mit­ment from Big Is­land Quar­ries in Wiar­ton to do­nate the stone re­quired for the Sauble town square project.

Coun­cil­lor Matt Jack­son also wanted to move for­ward and to direct staff to look into grant and spon­sor­ship fund­ing.

“I’ll go hit the pave­ment if I have to,” Jack­son said, adding, “This project’s still very much doable.”

Coun. Jack­son asked An­drew Sprunt, man­ager of public works for the town, if there were less ex­pen­sive ways of com­plet­ing the Colpoy’s Bay pier re­pairs.

Sprunt said no money had been spent to date on the project, but that it could still move for­ward in the win­ter and grants could be sought to fund the work.

Rob­son’s re­port to coun­cil said staff had al­ready ki­boshed the pier work for this year, to be re­con­sid­ered in the 2018 bud­get de­lib­er­a­tions, but Mayor Jack­son said she did not want to tell the res­i­dents that the project had been can­celled, pre­fer­ring in­stead to deben­ture that work also, once it is com­plete.

Coun. Gam­mie said, in ef­fect, the tax­pay­ers were told they were be­ing levied a cer­tain amount but if that amount had been “put in there prop­erly” there would have been a “huge tax in­crease.”

“And now we’re go­ing to try to sweep it un­der the rug by say­ing, ‘oh, we’ll just go out and bor­row the money.’”

Coun. Gam­mie called the de­ci­sion to deben­ture the projects “of­fen­sive to the tax­pay­ers,” es­pe­cially with­out con­sult­ing them be­fore ef­fec­tively in­creas­ing their taxes an­other eight per cent.

Coun. Gam­mie sug­gested coun­cil apol­o­gize to the tax­pay­ers if they are un­able to raise the full amount through spon­sor­ship and other fund­ing.

“In no way am I try­ing to sweep any­thing un­der the carpet. We’re try­ing to deal with it,” Deputy Mayor Kirk­land said. “We’re try­ing to be to­tally up front with the public.”

Gam­mie’s sug­ges­tion to look at all other sources, “any­thing but deben­tures” was de­feated, with only Coun. Vukovic in sup­port.

The town’s last tax hike was 2.96 per cent.

“This would have been con­sid­er­ably higher,” had the tax levy ac­tu­ally cov­ered all projects as planned, Rob­son said in an in­ter­view. South Bruce Penin­sula res­i­dents would have been hit with roughly 7.5 per cent more – for a to­tal mu­nic­i­pal tax levy closer to 11 per cent in 2017, she said.